According to Piper Jaffray analyst Gene Munster, Google could earn $1.3 billion in mobile advertising revenue in 2012, or $9.85 for each Android user. The analyst forecasted there would be 133 million Android users by 2012, and he arrived at the $1.3 billion figure by using publicly quoted numbers from Google itself.
To determine the $1.3 billion figure, the analyst used Google's self-stated figure that its mobile ad business is on a $1 billion annual run-rate, and Munster estimated the company had earned $850 million in total mobile revenue in 2010. Android specifically had generated around 16% of that total, or $130 million, said Munster. That means that each Android user generated $5.90 per year for Google, based on around 22 million Android users in 2010.
By 2012, there would be 133 million Android users, generating $1.3 billion in Android-related revenue he said. That equates to $9.85 per user per year.
Mobile Still Pales Next to Desktop Web
Despite this growth, Piper notes that even an ARPU (average revenue per user) of nearly $10 is still below what a desktop user generates for Google.
"As we noted, we believe Google's ARPU on Android was $5.90 in 2010. We believe Google's average revenue per search user was $18.85 in 2010 and average revenue per user for Google's advertising businesses in total was $25.77 in 2010," Munster said.
Below is a chart which shows just how far Android has to go before catching up to the desktop Web.